90.9 WBUR - Boston's NPR news station
Top Stories:
PLEDGE NOW
U.S.-China Economic Tensions

Tensions over currency and trade are reaching a high pitch. We see whether a showdown with China would boost, or bust, the America.

U.S. Treasury Secretary Timothy Geithner, left, is greeted by Chinese Vice Premier Wang Qishan in Beijing, May 2010. (AP)

U.S.-China economic ties are enormous, central to the world economy, and headed into a rough patch.

American politicians, officials, even the President, are complaining loudly that China is manipulating its currency – the yuan – to gain huge trade advantages. Those advantages hurt a struggling U.S. economy and cost American jobs.

Sen. Charles Schumer (D-NY) calls China policy “a boot to the throat” of U.S. recovery. There are tense talks and tough legislation in the works.  But China has issues and an agenda and a lot of power of its own.

-Tom Ashbrook

Guests:

Sewell Chan, reporter for The New York Times.

Robert Scott, senior international economist and director of international programs at the Economic Policy Institute. Read his new paper on the U.S. trade deficit with China and its impact on American jobs.

Eswar Prasad, professor of trade policy at Cornell University, senior fellow at the Brookings Institution, and former head of the International Monetary Fund’s China Division.

Keith Bradsher, Hong Kong bureau chief for the New York Times. Read his recent article “On Clean Energy, China Skirts Rules.”

Please follow our community rules when engaging in comment discussion on this site.
  • Nick

    How are we to trust our leaders in Washington DC setting a fair game with China economically.

    Shipping jobs to China is excellent for companies – BUT ONLY THOSE AT THE TOP and terrible for the other 98% of the employees.

    Washington is influenced and bought like whores by those few at the top to set up the game in their favor only.

    And China? Oppressor of its people, Communist Country, Building navies designed to go to war with the United States and many of its generals and admirals think was with the US is inevitable? And we gave them fair trade status. What is so fair about it?

    Where are the Conservatives in all of this? They lost their jobs too. But they support politicians who have whored with big business and China.

  • Joshua Hendrickson

    It’s nice to have a superpower relationship where we’re not rattling sabres throughout a worthless cold war.

    It’s not so nice to see an economic model for the 21st century that embodies some of the worst traits of capitalism with an utter disdain for democracy.

  • Lou

    We can thank Bill Clinton for all the manufacturing jobs that have been lost to China. The Clinton administration pushed hard for Most Favored Nation trading status for China, as a result, China’s economy is booming, and America is seeing the worst level of unemployment since the 1930′s.

  • joshua

    Lou–you conveniently leave out the fact that NIxon opened up China–not for peace–but for commerce–and globalization–so he could take American jobs and export them to China–for slave labor, for the wealthy 1%. Not for you. NOt for America.. Dont blame ClintoN for something Republicans started and champion. Nixon, Reagan, Bush–these lunatics established this aristocratic system. Clinto and Obama just have to deal with it as it now establishment–thanks to Republicans. But I’m just talking nonsense. The truth is–Republican or DemocrAt–all fascist! THE ILLUSION IS DEMOCRACY AND THE AMERICAN DREAM.

  • joshua

    Nick and Joshua Hendrickson above have really said everything that needs to be said. Great comments.

  • cory

    Cut ties with China, erect high tariff barriers to foreign goods, begin to rebuild American industrial capacity, protect the American workers and their way of life.

    I know, I know, a little less whiskey in my coffee in the morning! I can dream can’t I?

  • bob from burlington,mass

    Our government will do what’s best for corporations and the Chinese middle class.

  • Tatiana

    I’d like to hear from an economist just exactly HOW the US can change its trade dynamics with China. You cannot force a government like China’s to change its currency valuation policies, or to buy more American goods. Or to change the way it treats and pays its own citizens, for that matter. It’s easy enough to bully countries like Iran, North Korea and Cuba, but China is a different story.

    How can American policy-makers convince the Chinese to do things that are detrimental to their own economic growth? There’s nothing the US has to offer that the Chinese cannot get from some other place. On the other hand, if cheap Chinese goods stop flowing to Walmart shelves in America it would be a big problem as it would take at least several months to rebuild the American manufacturing capacity to supply the current level of demand (if you could find qualified workers willing to get paid less than Union-level wages). Besides, it’s not just Walmart anymore. Even Apple products are made in China. And we won’t even go into the stock market and all the Chinese cash that is financing American corporations and buying treasury bonds!

    It’s easy to blame the Democrats and/or the Republicans, call everybody a sell-out and scream for American jobs back. But the solution is not as simple as a slogan or a speech. Global economics is so intertwined that even the small seemingly insignificant countries are critically important to keep the delicate balance of global economic health, and giants such as the US and China need to work together in harmony, like it or not.

  • Edith

    A few years ago, I remember being back in America after a long stay in Europe and feeling very patriotic and everything and wanting to buy textiles -sheets and towels- made in America because they are the best. Impossible task. Every American brand maintained the quality of what I was used to but none of it was made in the Carolinas anymore. And so goes it for just about everything you buy. Made in China.

    I read that GM has just begun work on a 250 million dollar advanced technology center to develop alternative energy products in China. This is something they should be doing in Michigan, in the country that made them rich in the first place, but with these corporations and globalization, it seems like they don’t need us anymore. China has a captive, submissive workforce which is cheap and with one in every five people on the planet being Chinese, a huge potential for consumers. It’s not the fault of the Chinese people. I have absolutley nothing against them but I have everything against these trans-national corporations, looking only at their bottom line and the politicians that allowed this to happen.

    I don’t care about republican or democrat, I care about the working people and the welfare of my country. This nonsense of Clinton did this, Bush did that, liberal vs. conservative, black vs. white vs. Mexican, I’m educated and clever vs. you’re not, the other ways we divide ourselves; it’s all irrelevant. The social contract has been broken and we’re all affected by it. We were lulled to sleep by enticing cheap goods which made us feel rich for a while because we could buy lots of stuff at Walmart and Target, but now curiously enough, these are the only places many can (barely) afford to shop anymore because the good jobs have all gone to Asia. We’ve been diverted by ridiculous social issues -who is red, who is blue- while some people behind the scenes, have built tidy fortunes slashing jobs and moving factories overseas instead of investing at home.

    How could anybody ever have thought that it was a good idea to ship our entire manufacturing base to China? Who benefitted from that? It breaks my heart that we allowed this to happen. Now we shall have a bit of theater that Washington is trying to do something, but really, what can they do? What can we do? It’s all very upsetting. If we were so stupid as to allow the corporations to take all of our jobs and now technology too, overseas, without China really having to do anything, pay tariffs, enforce strict environmental codes, whatever!, in return, how can we be angry with them now because they want to keep up a thing that is good for them?

  • Brett

    Thanks to joshua for placing the original sin where it belongs: on NIxon! If Nixon is looking up from hell, it is while rubbing his hands with glee and mumbling something about, “take that America, that’ll teach you not to mess with ‘tricky Dick’!

  • William

    We should move away from free trade to a balanced trade system. If a company wants to import an item, they have to export an item of equal or greater value. We have been ctured by the elites 50 years ago that free trade with Japan would “open their markets to our products”. It never happened. It too, nearly 40 years just to get the Japanese to allow Washington State apples into their country. China has not intention to buy our products, just like Japan and South Korea.

  • Dean

    This is Capitalism, folks.

    You worship it, rail against what you call Socialism – but is not – and the whole Tea Party movement is built to fight against what is terms government interference with true American values….

    These are your true American values, people! Capitalism does not provide for the public good, there IS not social contract in a free market economy: it provides for the corporate good. Period. If there is cheaper labor over there, off go the corporations. It isn’t evil, it isn’t criminal, it is merely Capitalism.

    You love it …until you hate it.

  • Bernard

    As long as we like having cheap goosd, then China will continue to dominate. Anyone reading this comment, look at that computer monitor, ipad, laptop, cell-phone etc. where was it made? Probably China, Instead of looking in the past, and what has happened, I think we need to plan into the future, and innovate new products and services, to stay ahead of the game.

    Most American designed products like Apple computers, IBM, Dell etc are manufactured in China, It’s all a part of globalisation, we can cry over spilt milk, or we can roll up our sleeves and try to come up with the next elusive medication, or a newer technology etc.

    In my opinion what has happened is that America has had to catch up with the rest of the world, in terms of doing business, looking for solutions etc. Gone are the days when unions and the local infrastructure could protect our jobs, because nowadays someone can do that job for less pay, and turn put that product for less money.

    Bottom line, we have a choice to make we can advance ahead, or we can whine and talk about the old days. It’s 2010 lets innovate and plan for 50 years to come, and by the way the government will probably not help out that much, neither does it have all the answers, at best what you get is an innovation friendly atmosphere.

  • Larry

    The American military needs China to fund the 700 billion dollar budget the senate is going to pass today.

    We aren’t going to get tough at all. China will have their way with the US.

  • jeffe

    Well said Edith, I agree 100%.

    Corporations are always looking for cheaper labor and this is root of manufacturing moving offshore. Here in the Us this started in the 80′s. However regionally it started before. Textiles were made in New England, mostly in Massachusetts and then they all moved South to Georgia, South Carolina and so on. Of course the textile industry then moved South again to Mexico and now they are in South East Asia and China.

    The US has a long violent, and turbulent history with labor. Our country has always been defined by it even though people like to white wash it. As if this is the land of opportunity. Every inch of workers rights was fought for, a lot of blood was spilled in the process.
    Well it seems to me labor has lost. Sad but true.

    I was watching a documentary about these women in Mexico who work in electronic factories. They came to Mexico for cheap labor and a government that looks the other way with regulations. All the woman were sick from lead and other chemicals that were in the air in the factory.
    It was a Sanyo factory. Sanyo decided to move to Indonesia for cheaper labor. These people were making about $58 a week. The left without paying the severance which is a law in Mexico. The film is about them suing Sanyo and winning eventually. Sometimes people win.

    Now I read about companies moving from China to Vietnam or Indonesia for cheap labor. Bottom line is the US lost it’s will to hold on to manufacturing jobs decades ago.

    By contrast if we look at BMW in Germany they have the opposite attitude. They are constantly looking for ways to improve the workers job. They developed new technology for older assembly line workers so they could see better. Some of it was so simple, a large magnifying glass for a work station. They put in rubber mats to help with foot and leg strain. In short they valued the over 45 worker because of their experience and also due to a shortage of younger people with the right training for BMW. We don’t really do this in this country.

    China, well as Tom Friedman has said, China is eating our clock. They already are taking the lead on alternative energy technology. Mean while the Republicans are talking about tax breaks and the tea party is angry because Obama has a foreign sounding name and he can’t fix 8 years of damage fast enough. The same is true for the Democrats who are tied to special interest as much as the Republicans.

    Mind you China artificially keeps it’s currency artificially weak to boost it’s trade.

    This is an interesting article by Paul Krugman on the subject:

    http://www.nytimes.com/2010/09/13/opinion/13krugman.html?_r=1&ref=paulkrugman

  • cory

    Bernard,

    Yes, and the infinite growth model is the only rational solution. We must all work extra hard to win the race to the bottom.

    Count me out. I’m learning to live with less and throw of the opiate materialism I was raised with. This rat isn’t going to spend the next 50 yrs running on a corporate wheel.

  • Ellen Dibble

    I agree with Edith, but note that Americans over 65 (among others) are looking to big investment funds to keep up those corporate profits (made off the backs of cheap Chinese labor).
    Also, besides my retirement and your retirement (i.e., corporate profits — more if privatization of Social Security comes to pass, as Congressman Paul Ryan gets his plan through), there is corporate “investment” in financing campaigns (and hence, Congress, assisting financing state congresses so as to gerrymander state congressional representation); in other words, corporations have deep roots. China is part of corporate planning, but how?

  • Ray

    What is the difference in saying China undervalues its currency than to say the US has an overvalued currency? If we establish a policy of 10 percent inflation rate our currency will be seen as less safe and it will flood into the market.

  • Charlie Mc

    It is very difficult to understand highest levels of Financial Corporate Military Political wheeling and dealings in the modern era, but somehow I think a lot of our mess is due to the total absence of personal and corporate virtue and replacement by vice at the highest levels: Lust instead of Chastity
    Gluttony instead of Temperance
    Greed instead of Charity
    Sloth instead of Diligence
    Anger instead of Patience
    Envy instead of Kindness
    Pride instead of Humility
    Think about it.

  • Larry

    America is seeing the worst level of unemployment since the 1930’s.
    Posted by Lou

    We are officially out of the recession. Hurray!

    Tell that to the 20 million out of work Americans who Washington has decided can just go live on the streets along with the millions of people foreclosed on and the 57 million without health insurance.

  • Brett

    Bernard,
    Innovation is only one piece of the puzzle. As you say, we want cheap goods and China is dominating in manufacturing because of cheap labor keeping down the cost of producing those goods. We can innovate all we want to, but if the manifestation of those innovations (i.e., new products being presented to consumers) means having them made elsewhere, the result is the same as if we had no innovations, in terms of jobs, economic stability, etc.. China does not innovate, it imitates; they never have been able to compete with us in terms of design form and function.

  • Dean

    cory is right: as long as growth is our goal in a free market economy, we will lose our economic position. Growth is happening elsewhere now, not in the US. And it cannot return to where it was in our brief heyday. We need to have a managed, steady-state economy for the next century. Capitalism has left us behind, as it must.

  • Andrew

    Why would we want to bring jobs that Chinese are doing back here? Do Americans want to work endless hours in factories making widgets. Let the Chinese do it. We can always print more money to pay them for their labor. The question is when they will wake up and say “enough”?

  • Steve V

    Edith & Dean,

    I could not have summarized this issue as well as you have. Thanks!!

  • Ellen Dibble

    So should our government subsidize us (US citizens) via Social Security or welfare, and tell us our “job” is to set aside say 30% each week as an “investment” in global capitalism (i.e., corporate interests making big profits in China and so on)?
    So we would be tools of investment, using our government’s money to feed it back into investment portfolios where it can produce enough profit to keep us afloat (and the USA)?

  • Dean

    Brett, don’t count on Chinese imitation continuing our brief run of economic luck post-WW II. They said the same about Japan, then Korea, then…. All countries catch up eventually, and China has vast resources that haven’t been scratched yet. They have only been in the game a couple of decades. They are here, and they are far biger than we are …and they own our debt. More every day.

  • Ray

    Is china manipulating their currency or ours? Is their currency undervalued in respect to all other world currencies, or just the US dollar? They have their currency pegged to the dollar, would it be better to have it tied to the EURO or some other collection of currencies?
    If they did we would suddenly find the US could no longer borrow in its own currency. That has huge implications for our national debt.
    As long as we borrow in dollars, we can pay it back with inflation.

  • Carl

    It is interesting that before your show began this morning, the news reported on the Federal reserves approach to “manipulating” the US dollar. Please ask your guests to comment. Thanks.

    Carl C.
    Brookline

  • Dean

    Charlie McC cites:
    Lust instead of Chastity
    Gluttony instead of Temperance
    Greed instead of Charity
    Anger instead of Patience
    Envy instead of Kindness
    Pride instead of Humility

    Charlie, these are the essence of a free Capitalist society. (I left out the sloth part, which screws up my point!)

  • Gao Hong

    Instead of debating RMB manipulation and China’s selective compliance with their WTO obligations–both of which has caused the loss of American jobs that will never return–we should rather be looking forwards, just as the Chinese are doing.
    Beijing has identified a long term goal of becoming a service based economy by 2020 and pursued this relentlessly through various tools such as indigenous innovation programs, government procurement guidelines, tech transfer requirements, subsidy programs, export restrictions, etc.
    Regardless of if China is right or wrong, the US needs to focus on developing long-term high value added manufacturing and R&D industries(high tech and green tech).

  • Brett

    Dean,
    I wasn’t. I’m NOT extolling the virtues of US exceptionalism, I’m saying that innovation is not really the solution it’s touted to be. We need a new paradigm, a new way of establishing economic stability without consumerism as the engine driving it.

  • Bill

    This whole argument presupposes that a sovereign nation *should* allow its currency to be controlled by speculators and foreign countries. The so-called Asian Tigers learned their lesson a while back.

  • Ellen Dibble

    If China wants to become a “service economy,” which is more or less what this country is becoming, maybe we need to focus, as I posted above, on becoming an “investment economy,” and enable all of us to sit back and watch the profits pour into our accounts, the way the capitalists do. Just make sure each American is part of that.
    It would get the Tea Party off our backs.

  • Dean

    Sorry, Brett, I read you wrong. I agree: We need a sustainable economy, which means mostly producing what we actually need, and which is most efficiently produced locally. The only essentials to an economy are food, clothing, and housing. We have abandoned too much local farming, and almost all of our clothing industry.

    Growth is a cruel master, and it mostly benefits corporations. I believe that we need to abandon it as an economic deity, and find a way to manage a steady-state economy.

    http://steadystate.org/

  • http://husarich.com Amy Louise

    The current way of doing business is not working and sanctions do not work, but something is needed. 
I have garlic experience with China‘s garlic market. California garlic used to be the best garlic for producing dried garlic for the consumable industary. And it was reasonable priced on the world market. Then China entered the marked and undercut the Californian market.
China started grow large volumes of garlic and selling so low that the garlic fields in California were forced to stop growing their high quality product because they couldn‘t compete with China‘s prices even though China‘s quality didn‘t equal the Californian quality.
In the meantime China now controls the garlic market and is selling their garlic at high prices now that California has left the market and is no longer a competitor.


  • Dean

    I remember reading that China controlled at least 30% of the entire world’s economy for something like 1400 of the last 2000 years. No one should be surprised at China’s return to prominence. They are not flashing in the pan: this is their natural role in te world. Perhaps the US was the flash in the pan.

  • Daniel

    How much of the incentive to move American manufacturing to China is based on the devalued Chinese currency, versus China’s lax environmental regulation and low-wage workforce? Even if China’s currency increases in value, is that enough to drive American manufacturers to bring jobs back to the US?

  • Edith

    Who enforces WTO rules? Just curious.

    The closing of clean energy factories in Maryland & Massachusetts to move them to China is maddening! But how clever the Chinese are to foresee the need for energy independence and to use clean energy! Then turn around and export the solar panels. They are very smart.

  • Ellen Dibble

    I think I heard that WTO (World Trade Organization) does not allow subsidies on items traded. I’m noting this because I feel I’ve got to relisten.
    The effect I thought would be that agricultural subsidies would forbid us from exporting factory-farm American food to where it’s needed. Instead I heard about public highways no, private roadways yes.
    Then solar panels, sort of subsidized by China (via “deals”) are definitely getting exported to us (WTO or no WTO).
    I’m drowning in info.

  • Ralph

    To a certain extent the Chinese government is funding our purchase of their goods by funding a significant amount of our debt. This is a multi-edge sward that, while providing goods at less expense than for what they could be produced for in the US today, has the potential to ultimately result in significant inflation and reduction in our standard of living as we need to pay back the money we’ve borrowed, but more significantly, they use that money to buy US resources and thereby inflate the costs of those resources at our expense.

    An alternative that has the potential to address all these issues is to coin (print) the money needed to meet our tax deficit rather than borrow it. While such monetary policy certainly needs to avoid hyper inflation, it would make it more expensive and thereby more difficult for the Chinese to keep their money artificially deflated relative to the US $.

  • michael

    lol,

    those free market bankers see no problem in moving there companies to work under a state control country.

    Don’t we santion countries for HR abuses and slave labor? atleast we did once.

  • Dean

    Good point, Daniel. Whatever the advantage, China has more of it than we do now and forever.

    I repeat: There is no Public Good motive in a free market economy. Corporations will move wherever they must to make the highest profits.

  • Bruce

    Don’t apply a tariff…just inspect every single container that comes into our ports. Have the importers pay Americans to inspect the containers.

  • Brett

    Dean,
    Thanks, and agreed! I am much more interested in sustainability than growth. We have reached the saturation point of the growth model.

  • TJ

    Your guest mentioned that wall st and large US multi-nationals support a strong $ policy. But this starkly paints a Wall St versus Main st. conflict. Clearly creating US Jobs would be a greater priority today than encouraging corporation sto shift jobs aborad.

    Regarding Leverage. Of course we have leverage. US is the customer. If we stop buying their goods, China has a lot to loose.

  • Michelle

    For the future of the US, this is the most important dynamic today. US young adults see the world in global terms.

  • http://www.isat.jmu.edu/people/rudmin.html Joe Rudmin

    Since when do subsidies and import tariffs by China hurt the US? As Frederik Bastiat’s might have said, if China subsidized to the point that they were giving stuff away for free, that would leave us free to pursue other jobs. Likewise, an import tariff reduces their consumption, leaving more stuff for us. I think that the US complaint with China is a red herring to distract from economic blunders by our own government.

  • Henry

    The U.S. spends 20 times what China spends on military. The U.S. spends more than all other countries combined. This military spending is destroying our economy and future. Hundreds of billions of dollars are a giant subsidy to largely useless manufacturing, intelligence and unnecessary wars. Instead of subsidizing wasteful military industries, subsidize infrastructure, education, green and hitech.

  • Ellen Dibble

    How do American corporate profits compare to the Chinese bond purchases, what the USA borrows from China? It seems that our capitalist system is raking in profits as the world becomes more middle class, Africa, Asia, all over. It corporate profit were considered American profit, the way maybe Chinese (communist) government would take Chinese profits as national profits — then each American would benefit by corporate successes, by global growth.
    But how does this square with America as a government being hugely a debtor nation?

  • Dennis.in.Omaha

    We should not have protectionism. But we have the OPPOSITE of protectionism. Our tax structure encourages imports and we do not have the same advantage if we export.

    We allow the importers to deduct the increase of cost (including the cost related to currency manipulation) from their income.

    When they don’t pay taxes on that income, the net result is that we taxpayers pay the tax difference they should have paid. This includes the cost of their currency manipulation.

  • jeffe

    US solar power companies are moving to China due the investment by the Chinese government. Massachusetts is going to lose 300 good jobs because of our lack of innovation, imagination and dumb arguments about tax breaks for the rich that will create jobs.
    It might not seem like a lot, but would it not be a better story if this company was hiring 300 people instead of laying them off?

  • brandstad

    TOM,

    China has a huge advantage over the US. If they stop buying our debt, all interest rates in the US would skyrocket to the point that the US federal government could no longer deficit spend and our deficit payments could easily grow to 50% of Federal Tax Revenues crippling the US and causing the Federal government to have to make 50%+ cuts to its spending.

  • steve

    Edith, very insightful…no when will listen.

    If we are divided into teams (republicans vs. democrats)
    we care more about the score than if the game is worth playing.

  • Dean

    TJ said:
    “Your guest mentioned that wall st and large US multi-nationals support a strong $ policy. But this starkly paints a Wall St versus Main st. conflict. Clearly creating US Jobs would be a greater priority today than encouraging corporations to shift jobs abroad.”

    Welcome to the US oligarchy, TJ. As long as our voting public remains ignorant to the disinterest that corporations have in our well being, as long as the political momentum here follows the religion of the Free Market, our politicians will continue to serve those who serve them. And that is not the American worker. And it is not democracy.

  • http://cyberfumes.blogspot.com Dave Eger

    I don’t know if I’d rather be owned by the Chinese or by American corporations… that’s a tough call. I don’t speak Mandarin, so that could be tough, but at least the Chinese have some culture.

  • Ellen Dibble

    I guess my argument is if corporate bottom-line (Wall Street) capitalism is truly the governing principle in the world, then if Massachusetts loses those 300 solar-panel company jobs to China, the increased profit the company can realize from exporting the jobs should become part of the “pie” that the displaced workers then are able to “realize.”
    I don’t know the mechanism for that. It would be straight-out red communism, in one version. In other versions, tax policies redistribute the profits that a nation/government enables to those that might be on the losing end (displaced workers).
    The idea that globalization enables the greatest benefit and the greatest profit maybe should be embraced but redirected so that all that global growth and profit can benefit the “everyone” that is part of the pie that enables that profit.
    Will “jobs” as such be part of a globalized capitalist planet? We’ll see.

  • EIO Boston

    Edith and Dean God Bless. A tree so foolish that the branches fight themselves will not live for a long time. A few people are prospering at the expense of the country. We sent men and women to space, we know what is wrong here, but greed has blinded us to the obligation we owe each other as Americans. Notice that we only celebrate the highest paid executives/Athletes/Entertainers? see a pattern?

  • http://tombstone001.blogspot.com mohammed n. razavii

    No one even mentioned the unrealistically high standard of living in the US, based on borrowed money the federal deficit spending. If we were made to live within our means the trade picture would be different and deficits will go down. Then again do we really reward our non productive citizens with all the toys? Comforts? May be something we need to look at. Also. Do we need six hundred colors in pens? What is the impact of throw away battery operated hand tools on the environment, if we include these costs in to the price of junk we import the trade deficits will go down,

    may be even the federal deficit, and the earth will thank you

  • Steve T

    Dean,

    Unfortunately I find all your post dead on. I say unfortunate because no one will look at the truth of it.

    We the people have stuck our fingers in our ears over and over and loudly said LA LA LA LA LA LA because we don’t want the truth, we want the lolly pop.

  • Dean

    mohammed n. razavii, I could not agree more enthusiastically! We are living well beyond our means, financially and ecologically. But who will give up the excess “comforts” in a free society? Only the wisest few, I am afraid.

  • Ellen Dibble

    So corporate titans, with their eye on the future of the planet, will live lives in which nothing is discarded, as careful with usage and ownership as a person living in 1776.
    What approach can they have to the billions who have shorter-term approaches to living, hoping for instance to have children who can tend to them in old age, hoping for instance to extricate themselves from the roiling, suffering masses around them, to struggle up just far enough to survive a generation or so? Their very struggles could cost the planet this species in terms of energy consumption and spin-offs. It seems advisable to call off capitalism altogether; it’s leading us down “the garden path.” Actually, I would let China take the lead when it comes to energy; I believe their skies are gray with pollution already, and certain things are obvious to them, not to us.

  • JacFlasche

    Referring to China Dean wrote: . . .”They are here, and they are far biger than we are …and they own our debt. More every day.”
    Posted by Dean, on September 21st, 2010 at 10:21 AM

    If by bigger you mean China has a larger population, that is correct. If you mean larger geographically you are incorrect.

    If you mean they have a larger industrial base, this is also incorrect. The USA industrial base is about three times China’s.

    If you mean they have a more powerful military, I guess it depends on if you get into a limited land war in Asia.

  • Ryno

    It’s not just cheap goods and jobs: When the renminbi appreciates against the dollar our monetary debt to China would effectively be decreased.

  • JacFlasche

    Tatiana wrote: “Global economics is so intertwined that even the small seemingly insignificant countries are critically important to keep the delicate balance of global economic health,. . .” Posted by Tatiana, on September 21st, 2010 at 8:39 AM

    Generally some fine thoughts in your post, but I could not think of a single example of a “critically important seemingly insignificant country.” Can you?

  • Rob

    I think your President OBAMA also said China as a huge market is also vital to the ecomonic recovery…this is the trend that can not be overturned, which is more and more US companies will move offshore, maybe not China, but somewhere, not only for its cheap labor, but also for its huge market.

  • Jim in Omaha

    It is literally against the law for a U.S. corporation to care about how jobs located in the U.S. are affected by its efforts to make a profit.

  • david

    China is a very patient society with long term goals. China will one day soon be the big dog on the hill. America is fastly giving up the position because we as a people are sick of being on top. We are bored with the system that made us a super power. Money will follow the cheapest labor, so the exodus of industry will continue. Meanwhile, America will coninue to fill up with people with needs to be met and fewer jobs to fill those needs.

  • Paul

    Everyone loves cheap stuff from China. Go to Wal-Mart, Home Depot any number of big box stores. Americans need to look in the mirror. We are as guilty as the government.

    File for unemployment take your last paycheck and buy a 50″ plasma, watch Fox news and blame someone else.

  • Jeff

    Multinational corporations, now larger than many countries, are going to happily move to where the labor is cheapest, playing the populations of different countries off of each other. One thing the U.S. government can do to alleviate the problems for its citizens is to push for international labor unions and freedom for the citizens in other nations, such as China, to join those unions. Fight for equalized wages, equalized environmentalism, equalized quality of life.

  • Frantz

    We are all responsible for China’s growth, and that’s a good thing. When you and I go out to the store or the car dealer and spend our hard-earned dollars on products made not in the USA,we do one thing: increase the trade imbalance in their favor. Yes, the cat has been out of the box, and there’s no way to get it back in. However, indivual american can reverse the trend.

  • jeffe

    It appears that the Chinese are also beating the Russians in their own backyard:
    Chinese Business Gains Foothold in Eastern Europe

    http://www.nytimes.com/2010/09/22/business/global/22chinaeast.html?hp

  • http://tombstone001.blogspot.com MOHAMMED N. RAZAVI

    In an equalized world, either the workers will all have a very low standard of living, or the planet will not be able to sustain the damage to the environment and the depletion of natural resources will cause the standard living for all to be effected negatively. The only solution will be drastic population control. We are headed that way, soon.

  • bruce grill

    Tom;
    I know you would prefer to pronounce it correctly.
    molybdenum |məˈlibdənəm|

    The China trade war scenario ignored the inflationary repercussions of moving those jobs back to the USA. Retailers’ margins account for more than 2/3 of a product’s cost. The inflated RMB portion of the product’s cost is minimal. Labor cost is less still.

    China bashing (as ever) is compelling and salient. But other than for electioneering for the mid-terms, it is a pointless activity.

  • Sarah Elizabeth

    What’s most interesting is how the Chinese themselves are embracing their new position as the second largest economy in the world. As described here, China’s been unusually contentious as of late, but belittle themselves at the same time. Jeffrey Wasserstrom describes this complex well: “A closer look reveals that President Hu Jintao’s words and deeds are often shaped by a mixture of insecurity and cockiness, and that Chinese officials alternate between playing up and playing down the country’s rise.” You guys might find his article interesting. Check it out here: http://www.project-syndicate.org/commentary/wasserstrom3/English

  • Rob L

    I’m trying to picture how we could get a worse deal from trade with China but I’m having a hard time. We get unemployment, junk that breaks in 3 months, and bigger profits for a few corporations. They get 16 year old girls working 7 days a week, rivers running grey with pollution, cities that make Dickensian London look liveable, and a communist dictatorship that gets richer and more powerful.

    There’s no doubt the Cornell professor knows which side his bread is buttered on. Keep the junk flowing in and the dollars and jobs flowing out and the corporations getting more powerful. I’m sure he has pretty formulas to prove how it’s best for all of us.

  • Tom

    “It is literally against the law for a U.S. corporation to care about how jobs located in the U.S. are affected by its efforts to make a profit.”
    Posted by Jim in Omaha, on September 21st, 2010 at 3:59 PM

    In fact, the not only is that not true, the bigger myth is that senior management and the directors of a corporation are required to make a profit, or have a duty to make a profit.

    I invite everyone here to go to their local county law library and check out their state’s statutes covering incorporation (yes, incorporation is strictly a state matter). Read the very first paragraph. Somewhere there will be a sentence stating that for profit corporations cannot be required and do not have to make a profit. Corporate officers have no legal duty to manage a company in such a way so that it makes a profit.

    In fact the only legal duties of management to shareholders is that they don’t literally cart money out of the corporate offices (embezzlement and co-mingling), that they don’t act so stupidly that someone with half the brains of Forrest Gump thinks it is stupid (the reasonable person test) and that they don’t violate the corporate bylaws (which is kind of hard for shareholders to prove since these are usually kept under lock and key at the corporate HQ and require that the shareholders read them there).

  • Gail

    Global labor arbitrage is an economic phenomenon where, as a result of the removal of or disintegration of barriers to international trade, jobs move to nations where labor and the cost of doing business (such as environmental regulations) is inexpensive and/or impoverished labor moves to nations with higher paying jobs.

    However, consumers in nations that have lost jobs may also suffer a decrease in wages, income, benefits, and working conditions that is greater than any decrease in consumer prices along with other invisible back-end costs such as increased unemployment and under-employment, a greater need for government social welfare services, crime, and other social problems.

    U.S. politicians have no plans to reverse global labor arbitrage. In fact, President Obama has already stated the jobs lost are not returning.

    America has already developed signs of a third world nation and in no time at all this once great nation will become one.

  • justanother

    Get rid of Wall Street, no company should “grow” forever, this business practice is not sustainable and realistic.

    If we put a price on natural resource, a price of environmental cost, Bill Gate, Warren Buffet…..etc, those mega rich won’t even exist.

    Our root problem is human greed is encouraged and glamorized.

  • justanotehr

    Watch this “A conversation with Tung Chee-hwa, Former Chief Executive of Hong Kong” with Charlie Rose, interesting perspective about China —

    http://www.charlierose.com/view/interview/10266

  • justanother

    ***It’s not just cheap goods and jobs: When the renminbi appreciates against the dollar our monetary debt to China would effectively be decreased.
    Posted by Ryno, on September 21st, 2010 at 1:22 PM***

    First, ask ourselves, why do we accumulate so much debt in the first place?? Is this really becoming a true American culture, borrowing money first knowing how much interest they’ll be paying down the road, then come back and blame someone else for their debt?? What a shame!

  • Ryan in China

    Interesting comments. I am an American who lives in Taizhou China.

    I have learned a lot about the culture. China has its own problems.

    Huge disparity in rich and poor. Huge young male population who are having difficulty finding jobs. China/India/Pakistan/Japan’s relationship is ambiguous at best. China could care less what America is doing now as long as they don’t lose value for the money they let us borrow.

    China has a vast interest in Africa. Sooner, rather than later Chinese Factories will move to Africa. The African people love the Chinese there. I have been to Lagos Nigeria with my wife who is Chinese to sell motorcycle parts since China is the worlds leading manufacturer at over 50%.

  • http://profiles.google.com/ridereye Rider I

    Rider I 
    Special Library Manager
    http://rideriantieconomicwarfaretrisii.blogspot.com/

ONPOINT
TODAY
Aug 27, 2014
Russian President Vladimir Putin, left, shakes hands with Ukrainian President Petro Poroshenko, right, as Kazakh President Nursultan Nazarbayev, center, looks at them, prior to their talks after after posing for a photo in Minsk, Belarus, Tuesday, Aug. 26, 2014. (AP)

Vladimir Putin and Ukraine’s leader meet. We’ll look at Russia and the high voltage chess game over Ukraine. Plus, we look at potential US military strikes in Syria and Iraq.

Aug 27, 2014
The cast of the new ABC comedy, "Black-ish." (Courtesy ABC)

This week the Emmys celebrate the best in television. We’ll look at what’s ahead for the Fall TV season.

RECENT
SHOWS
Aug 26, 2014
Matthew Triska, 13, center, helps Alex Fester, 10, to build code using an iPad at a youth workshop at the Apple store on Wednesday, Dec. 11, 2013, in Stanford, Calif.  (AP)

Educational apps are all over these days. How are they working for the education of our children? Plus: why our kids need more sleep.

 
Aug 26, 2014
Federal Reserve Chair Janet Yellen, right, speaks with Ady Barkan of the Center for Popular Democracy as she arrives for a dinner during the Jackson Hole Economic Policy Symposium at the Jackson Lake Lodge in Grand Teton National Park near Jackson, Wyo. Thursday, Aug. 21, 2014.  (AP)

Multi-millionaire Nick Hanauer says he and his fellow super-rich are killing the goose–the American middle class — that lays the golden eggs.

On Point Blog
On Point Blog
Poutine Whoppers? Why Burger King Is Bailing Out For Canada
Tuesday, Aug 26, 2014

Why is Burger King buying a Canadian coffee and doughnut chain? (We’ll give you a hint: tax rates).

More »
1 Comment
 
Why Facebook And Twitter Had Different Priorities This Week
Friday, Aug 22, 2014

There’s no hidden agenda to the difference between most people’s Facebook and Twitter feeds this week. Just a hidden type of emotional content and case use. Digiday’s John McDermott explains.

More »
Comment
 
Our Week In The Web: August 22, 2014
Friday, Aug 22, 2014

On mixed media messaging, Spotify serendipity and a view of Earth from the International Space Station.

More »
Comment